A former Googler and current partner at InterWest Partners, Desai brings unique perspective to our series. He has worn all the important hats: Product Manager, Founder, Investor, User. As a result, he’s developed a clear knack for zeroing in on key trends and figuring out how to turn good products into great ones.

Keval and Matt, our Director of Product, cover a lot of topics in Part One, including:

The consumertization of B2B enterprise software

How Optimizely’s founding team nailed product-market fit by giving their users freedom from both engineering constraints and purchase approvals

What animal DNA would, when spliced with that of a human’s, generate the best product manager...

Matt Pasienski: We'll make [crosstalk 00:00:10]. If you're going to use this they'll use [crosstalk 00:00:11] ...

Keval Desai: There is no privacy anymore in this world.

Matt Pasienski: No expectation of privacy either.

I'm here with Keval Desai who has immense experience on every facet of product from the founder of a company to a PM at Google for AdWords and now an investor for InterWest. The first question I have for you is when you're looking at a market and you're, as a product a manager, what are the big signs that tell you that this is somewhere to go and then also delimit it; where are the boundaries of that market and where should you stop?

Keval Desai: That's a great question. I think what I look for are daily habits. If you want to look at big markets where people are addicted to a great product experience, I think usually you want to look at how people spend their time and daily habits. Let's take a real-world example, brushing your teeth. Sounds like a basic, mundane thing. People do it at least two or three times a day. Driving your car, going to work, using a computer, working out, eating food, the education, these are sort of daily habits that are part of human day-to-day living. Where I find my inspiration for large markets in those daily habits and then there's always destruction going on within those daily habits. The way you used to go to work 20 years ago is different than the way we do now. The way you used to learn 20 years ago is different than the way we do so now. Look for daily habits and the destructions around those.

Matt Pasienski: I think a lot of people would go in looking at a market by dollar size. Would you say actually measuring the amount of time that someone spends is perhaps like a better indicator, a leading indicator?

Keval Desai: I think certainly that's one way to look at it for consumer products. If you look at how users spend their time, you look at the activities and the use cases, if you will. The phrase use case is very important to me. When I look at big market I define it initially by what is the use case, how prevalent it is and how frequent it is. I think if you can identify that then the monetization of that which then translates into dollars will follow.

Matt Pasienski: You mentioned when you're doing a b-to-c product you have one set of criteria ... You have invested in some very successful b-to-b companies, one that jumps to mind is Optimizely which we use. We think it's amazing. What tells you that that's a great market, the a-b testing, what were the things you were looking for when you invested early?

Keval Desai: Yeah, Optimizely, great company. Dan and Pete Siroker who are the co-founders of the company worked with me at Google and we're lucky to invest in them. I think that the big distinction between b-to-c and b-to-b is that typically in the b-to-c markets the user of the product is also the buyer of the product, they're also the ones who are spending their own money buying the product. Typically in b-to-b that has not been the case in the sense that the user of the product, the employee, is not necessarily the person who approves the buying decision for that product. There is a distinction there. In the past, typically, that has meant that people spend a lot of money on software that never gets used actually on a day-to-day basis. I think if you look at the companies like Optimizely they have bridged that gap because Optimizely started by letting individual employees use the product and then also pay for it using their credit card online or the other companies like Dropbox and others have done the same thing where so this consumerization of the enterprise that we talk about bridges the gap between the user of the product and the buyer of the product. I think when you see that that usually leads to a great product outcome because people are now voting with their wallet, if you will.

Matt Pasienski: When you were there at the beginning was that part of the initial thinking or is that something that they found worked after some practice?

Keval Desai: I think it was part of the initial thinking. Optimizely's thinking came from Dan and Pete having worked at Google and having done website optimization at Google on behalf of Google products and then Dan in particular left Google to go join President Obama's initial presidential campaign in 2008. If you remember, that presidential campaign was known for its effectiveness in online campaign contributions. This idea of a-b testing, Dan took that with him from the Obama campaign to start Optimizely. I think he had seen that the most effective products, the daily habits, if you will, are the ones that get an employee excited about making their work efficient on a daily basis without having to rely on other people in the company. For example, a marketeer wants to do an optimization, typically they would need help from an engineer, who's very busy. Optimizely liberates that marketeer from having to do their own work.

Matt Pasienski: That's exactly what our team loves. Our marketing team can go and make the changes and they don't have to go ask the engineers or stop their work.

Keval Desai: I think if that becomes a daily habit then monetization follows from that because you would see value in paying for a service like that.

Matt Pasienski: But one thing I want to just highlight here is that President Obama's campaign has led to, I think, several start-ups now. They're very successful.

Keval Desai: It's an incubator by itself.

Matt Pasienski: It was like the spark that generated ... That's pretty impressive that it was that insight that they brought over from the political world and then they're starting up down on Howard Street.

Keval Desai: Dan has written a book about it, too, so you might want to take a look at that.

Matt Pasienski: I need to get it.

Keval Desai: Go buy it on Amazon.

Matt Pasienski: Second question: if you had, you're familiar with the genetics industry is becoming a big investment, a lot of people looking into genetic engineering, what animal would you splice with a human being to produce the best product manager?